Borrowers are small and medium enterprises, borrowing capital to satisfy investment budget for business, prodution, and development investment services. Small and medium enterpires operating in Vietnam are eligible for borrowing from the project, including:

+ Enterprises operating under Law on State Enterprises No. 14/2003/QH11 dated November 26th 2003.

+ Enterprises established and operated in adherence to Law on Enterprises No. 13/1999/QH10 dated June 12th 1999.

* Loan principles:

- Using the loan properly as stated in loan purpose.

- Having obligations to repay (principal and interest) fully on time.

* Loan conditions:

VBSP shall consider lending to a SME if such SME meet following requirements:

- Has full civil legal capacity:

+ Being considered as a legal body as stipulated at Article 94 and Article 96 of the Civil Law and other regulations of laws of Vietnam; for dependant accounting enterprises, a written authorization of a direct legal management entity is needed.

+ Private enterprises: owner of private enterprises shall have full civil legal capacity, civil act capacity and the enterprises are operated under Law on Enterprises.

+ Partnership enterprises: members of partnership shall have full civil legal capacity, civil act capacity and the enterprises are operated under Law on Enterprises.

* Loan utilization is legal:

- Having financial capacity to ensure debt repayment as pledged:

+ Having own capital to partially invest in business, production or service plans/projects.

The size of own capital investing in business, production or service plans/projects is calculated basing on total capital demand, i.e: for short term loans, borrowers shall have at least 20% of total capital demand, for medium term loans, 30% is required.

+ Doing busisness effectively and profitably.

+ Having no bad debt or over due debt of over 6 months at VBSP and other credit institutions.

+ Having feasible and effective investment, production and business projects/plans.

+ Executing regulations on loan security of VBSP.

* Loan terms:

- Short-term loan: up to 12 months.

- Medium-term loan: up to 60 months.

* Lending interest rates:

- Prevailing interest rate is: 10.8%/year.

- Over due debt rate is 130% of contract rate.

* Loan size:

- Maximum is VND 500,000,000/enterprise

* Loan extension:

- Short-term loan: loan extension shall be conducted one or several times but total extension duration should not exceed 12 months.

- Medium term loan: maximum total loan extension duration should not exceed 1/2 of loan duration stipulated in the loan contract.